The buzz in Europe is about Omnicom's ups and downs

I spent much of the past few weeks in Europe, in London (twice) and at the Cannes International Advertising Festival. It would be a relief to report everyone there is debating fiercely the merits of the Cannes Lions winners, but it simply isn't the case. There is only one subject: Omnicom.

There is a fascination with the sheer sums of money involved in its dramatic share collapse: Has Keith Reinhard really lost $23 million in three months? Have Allen Rosenshine and Bruce Crawford really lost more than $13 million? Is John Wren down $10 million? Of course, these are all "paper" losses.

The real root of the interest in Europe is a result of a general "wisening up" by rank-and-file agency personnel (or at least the managers to whom I spoke) to the potential long-term consequences of a damaged stock price. Many fear that the share-price malaise may mean future mass layoffs at Omnicom operating companies, regardless of their performance. They worry how to motivate, attract and retain staff in light of the disconnect between business performance and financial reward.

Others wonder if Omnicom CEO Wren can survive. If Jean-Marie Messier can be forced out at Vivendi-Universal, then can any "master of the universe" be safe? Wren, however, has the support of his board.

As CEO, Wren will accept a degree of personal responsibility for the current debacle, particularly as it appears to have been sparked by an innuendo-heavy Wall Street Journal story that fed into the current McCarthy-ite hunt for the next Enron. However, in Wren's defense, let's have some common sense here.

Yes, Omnicom should never have allowed itself to come under such suspicion. This is easy to say with the benefit of hindsight, but the trauma might have been avoidable with better corporate affairs/investor relations work once the twin stimulants-the resignation by the head of Omnicom's audit committee, and anxiety over Omnicom's handling of its struggling Internet investments-came to light.

Omnicom has been strangely reactive, as if it was not the classy industry-leading owner of, among other things, some of the world's top public relations companies. This puzzles its staff and its rivals around the globe.

Omnicom's rivals need Omnicom to thrive. The sector is too small to be anything other than mutually dependent. At Advertising Age's recent AdWatch conference in New York, WPP Chief Executive Martin Sorrell described the Omnicom saga as "a miscorrection." Maurice Levy, CEO of Publicis, was equally frustrated. They want to see a strong Omnicom-only not too strong.

Wren will and should survive. Yet it is a concern that a leading Wall Street analyst, Merrill Lynch's Lauren Rich Fine, was largely ignored when she wrote "fundamentally, we do not think there are issues" [at Omnicom] and maintained her "strong buy" rating.

What the bar-room analysts in Cannes and London really want to see is a fighting Omnicom on the offensive, acting like the industry leader we know it to be; the leader it has been, for the large part, since it was created. The indomitable Wren will surely come out fighting soon. n

Stefano Hatfield is editorial director of Ad Age Global and Creativity.